30th

I got into a conversation on tumblr about unemployment in the US, and how to fix it. Jakke's conclusion was pretty bleak:

So the way things are going right now it looks like skilled workers (especially people like programmers) can expect their prospects to remain pretty decent and unskilled workers can expect their prospects to remain dismal. And the kind of policy changes it would take to make a difference are definitely not forthcoming.

What he's talking about is a serious structural problem with the employment market in the US. The US unemployment rate is 8.1% right now. But if you break apart that number, there are some huge differences by industry. Here's a worrying graph of the last decade:

The general unemployment rate for "knowledge" professions -- medical, financial, managerial -- is actually pretty low: between 3% and 5%, and it never rose above 5%. There was a slowdown, for sure, but 5% unemployment is still pretty good times, historically speaking (the last time overall unemployment was sub 5% was early 2007).

The unemployment rate for "computer and mathematical" occupations (not broken out separately in the graph) is even lower: it's currently 3.1%. This is pretty much as close to zero unemployment as a liquid market can get; what jakke calls the "friction rate" -- 3% represents people who've quit one job and are interviewing for the next. Tech workers aren't in a recession; they're in the middle of a boom.

Meanwhile, the unemployment rates in "labour" sectors are still over 12%; in construction the rate broke 20% in February of 2010 and is not even on track to get back under 10% before 2014. This isn't a recession so much as a disaster. As Steve Jobs famously told President Obama at dinner, "those jobs aren't coming back".

The fundamental question is: if there's 15% unemployment in one industry and 3% in another, why aren't people switching jobs?

One problem is that knowledge work requires high levels of education. A lot has been said about America's failure to educate its children in math and sciences, and those points are all valid: a huge increase in investment in education at all stages is necessary, and a refocusing of priorities towards the sciences is a good idea. In particular, I think the way programming is taught needs to be radically overhauled, but that's a subject for another post.

What's talked about less is the obvious fact that not everyone can be a manager, a programmer, a doctor or an accountant. These things take relatively rare levels of intelligence and aptitude that are only shown by the top 20% or even 10% of the population. The vast majority of people are in the middle of the bell curve. They used to have blue-collar jobs, operating machinery in factories, or white-collar jobs, pushing paper around in offices. But both those types of jobs are rapidly disappearing, being eaten by robotics and software.

So that's my first point: people aren't switching jobs because the jobs available are too specialized and complicated for them to do.

Meanwhile, high-tech industries are being strangled by a lack of smart people. Programmers in particular are earning insane, unjustifiable salaries (have I mentioned my company is hiring?). To me this seems silly, inefficient and ultimately unsustainable.

Stop shooting ourselves in the foot

Massive demand for skilled workers and zero demand for unskilled workers suggests a course of action, which brings me to my second point. If there are a bunch of people sitting around unemployed while there's a ton of work to be done, that's not their fault; it's the fault of the people who need the work done. It means it's worth putting some time towards finding a way to use that untapped labour force, by trying to build "knowledge factories".

What do I mean by that? Think about how a physical factory worked. The reason unskilled jobs in manufacturing, say, cars existed is because some very highly skilled people first got together and looked at the process of building a car and said "okay, we can automate this bit and this bit and this bit, but making machines to do this bit is way too hard". The blue collar workers of Detroit didn't know how to build cars: they knew how to operate one particular bit of machinery. The only people who knew how to build cars were the guys who put the machines together.

Now let's try applying that model to web development, an example I pick because I know a fair bit about building web sites. Think about all the businesses in the world that have web sites, or need them built or maintained. There is an entire industry built around cranking out simple websites for small businesses, in WordPress or Drupal or a thousand proprietary solutions. This industry is making a bunch of smart freelancers a ton of cash, which is great for them individually, but terrible for the tech sector as a whole. Why are we still building these simple websites one at a time, often by single freelancers?

It's as if Detroit were a city of craftspeople who built one car at a time from scratch in their garage at home -- with love and care, but slowly and enormously expensively, like the first cars. And because those fine, skilled developers are busy hand-crafting bespoke websites for huge sums of money, it means terrible developers can earn a good living slapping together terrible websites, and some companies with limited budgets just can't afford a website at all. That makes everything harder for everyone, and the economy less efficient.

It's time to build knowledge factories

Where are the website factories? Obviously there are dev shops and agencies that employ hundreds of people and reap economies of scale and specialization, but those aren't factories as I just described them. If you wanted to follow the model of a factory, then a few very skilled developers would get together and design really good, generic websites: heavily researched, carefully constructed, configured to work with minimal maintenance for long periods under high loads. Then they'd train a bunch of significantly less skilled people to do the "final assembly": slap the images and text into place, move pages around, turn features on and off. All via highly specialized tools requiring no programming expertise whatsoever and maybe a week's training.

There would be a range of models -- sporty for those who want flash with less function (restaurants, galleries, vanity sites); heavy-duty for those with a lot of work to do (ecommerce sites); and a generic, good-for-everything runabout, for everyone from individuals to mom-and-pop businesses. You'd go to your local website dealer (who might know a lot about websites, but doesn't build them on-site), pick out your model, and spend a day or two getting it customized -- that's all it takes because there's only so much it allows you to change. But you're willing to make that compromise because it's a hundred times cheaper than a custom build, and good enough for your needs.*

Suddenly functional, value-adding websites are democratized: everyone can afford one, often of higher quality than custom models of just a few years earlier. The factories update their models every year, providing new and improved features and safety, as well as more highly-skilled work for the designers and repeat business for the lower-skilled dealers and customizers. And all those clever people who were pulling down a hundred grand a year building custom websites for hair salons will have to either take a pay cut or move on to more innovative, creative, and ultimately fulfilling work at those companies that previously couldn't find anyone at any price.

Information technology needs an industrial revolution

Will websites mass-produced in this way be as good as the custom-built sites of today? It depends. Those who could previously afford to spend $5-$10k might now prefer to spend $500 on a mass-produced site of lower quality. But the people who are today paying $1000 for a splash page with an email link will suddenly have a site that actually generates sales and takes orders. They'll be one-size-fits-most affairs, with less design flair and spontaneity in order to appeal to a wider audience, just like car designs. But as web developers, it's time for us to grow up: our fetish for getting the fonts just right and the white space just perfect, and indulging customers' every design whim and unusual feature request, is also self-indulgent. We're earning too much money doing something that could be done more simply and orders of magnitude more cheaply. We need to move on to real problems and new challenges.

And the analogy holds true, to lesser or greater degrees, across much of the software industry. We need to stop building software for each customer and start building software assembly lines: harder, less fun, but hundreds of times more productive -- and profitable. And once we've built the assembly lines, a new generation of blue-collar knowledge workers will be able to step up, doing the things that robots can't do, just like they did before. Pulled off of unemployment lines, they'll spend again on housing, clothes, travel and entertainment: this is how you end a recession.

Because this isn't just some altruistic ideal -- this is how to rescue the American economy. Everything is software now, but software developers are holding everyone back with our greed for easy money, rationalized as an idealistic pursuit of perfection and craft. In our complacency, we're dragging a whole nation down with us. That's a problem, and one you are uniquely equipped to solve. Doesn't fixing the economy sound better than sculpting yet another vanity site? Then get to work.

* This analogy can go on and on. You'd get website hot-rodders who customize their sites, the whole ecosystem of accessories and tools, even tacky user-installed bolt-ons -- the truck nutz of the new web world.